Over the past two decades, Central Asia has experienced steady and often impressive economic growth. According to experts, Central Asian countries have consistently outpaced both global and developing country growth averages. In 2024, the combined GDP of Central Asian countries surpassed $500 billion, while foreign trade turnover increased nearly nine-fold since 2000 and foreign direct investment rose by a factor of 17. Yet as many experts emphasize, sustaining this momentum will require the region – Kazakhstan, in particular – to adapt to evolving global economic realities.
Kazakhstan’s economic growth has long relied on its oil, gas, and mineral exports, which have funded infrastructure, social programs, and public services. This resource dependence, however, leaves the economy vulnerable to volatile commodity prices and geopolitical shocks, such as sanctions on neighboring countries or supply chain disruptions following Russia’s invasion of Ukraine.
These sectors are also capital-intensive but generate limited employment, making them ill-suited to meet the needs of a growing, urbanizing population. For more inclusive and resilient growth, Kazakhstan must diversify into job-rich, innovation-driven sectors like manufacturing, logistics, agriculture, and clean energy. As the global economy shifts toward decarbonization and digitalization, continued reliance on fossil fuels risks becoming a long-term liability.
Recognizing these dynamics, the Kazakh government has pledged to accelerate the shift toward a more diversified, non-resource-based economy. Speaking at the Astana International Forum (AIF), Vice Minister of National Economy Arman Kasenov highlighted high-productivity, export-oriented sectors, especially in raw material processing, as priorities. While still resource-linked, these industries mark a move up the value chain and toward industrial diversification.
To support this transition, national development finance institutions plan to invest around $100 billion in the coming years. Early signs are promising: Kazakhstan’s economy grew by 6 percent in the first five months of 2025, driven by strong performance in industry, construction, trade, transport, and communications.
Three sectors stand out in Kazakhstan’s diversification agenda: clean energy, transport and logistics infrastructure, and agriculture. Each offers opportunities not just to reduce dependence on resource exports, but to integrate the economy more deeply into global value chains and provide more inclusive employment.
Clean Energy
While Kazakhstan is best known for its oil, coal, and gas reserves, it also holds significant renewable energy potential. The southern steppe regions, such as Zhambyl, Shymkent, and Kyzylorda, benefit from high solar irradiance, while strong, consistent wind corridors run through Akmola and the Caspian coast.
By the end of 2024, Kazakhstan had built 148 renewable energy facilities generating nearly 3,000 megawatts of clean power – including 59 wind farms and 46 solar plants, along with hydro and biomass sites. Yet renewables made up just 5 percent of the national energy mix, well below the government’s targets of 15 percent by 2030 and 50 percent by 2050.
To bridge this gap, Kazakhstan has pledged carbon neutrality by 2060 and introduced incentives such as feed-in tariffs and energy auctions to attract private and foreign investment. The next frontier is green hydrogen, with pilot projects already underway, including a major initiative in Mangystau region with Germany’s Svevind Energy.
Another key partnership includes the Zhambyl Wind Project, a one-gigawatt installation being developed with UAE-based Masdar. Masdar CEO Mohamed Jameel Al Ramahi recently stated the company sees Central Asia as “a promising region for such solutions” and is “ready to help drive growth.”
While still in its early stages, Kazakhstan’s clean energy sector is gradually gaining traction and could form a foundational pillar of the country’s low-carbon industrial future.
Transport and Logistics
It has been well established that Kazakhstan’s geographic position between China and Europe makes it a natural transit hub. The country plays a central role in multiple emerging trade corridors, including the Trans-Caspian International Transport Route (commonly known as the Middle Corridor), the North-South Corridor, and China’s Belt and Road Initiative.
At the AIF, former United Nations Secretary-General Ban Ki-moon noted Kazakhstan’s transformation into a key Eurasian connector. In 2024, cargo volumes along the Middle Corridor increased by 60 percent compared to the previous year, reaching 4.5 million tons. The government aims to more than double this figure in the next few years.
To support this ambition, Kazakhstan is investing $35 billion into transport infrastructure from 2023 to 2027. Major projects include new rail lines, port expansions, and the development of dry ports in strategic locations. Kazakh Deputy Foreign Minister Alibek Kuantyrov underscored the importance of these investments in positioning the country as a regional logistics hub.
International institutions have taken note. The OECD’s Deputy Secretary-General Fabrizia Lapecorella identified Kazakhstan as the leading reformer in the logistics sector in Central Asia, pointing to growing traffic, improved trade facilitation, and targeted infrastructure upgrades. Continued investment in this sector is likely to yield broader regional integration.
Agriculture and Agri-Tech
With over 215 million hectares of agricultural land, Kazakhstan has long been a major grain exporter. In 2024, the country harvested a decade-high 26.7 million tons of grain, contributing to 12.7 percent growth in the agricultural sector. Crop production rose nearly 19 percent, supported by increased investment, while livestock production also saw modest gains.
Yet much of Kazakhstan’s agricultural potential remains underdeveloped. Shifting from low-margin bulk grain exports to high-value products, such as fruits, vegetables, and processed foods, could enhance productivity and rural employment. In particular, Kazakhstan is well-placed to supply food-insecure regions in Central Asia, the Middle East, and Africa.
Further opportunities exist in meat and dairy processing, especially for halal-certified exports to Gulf markets. Kazakhstan’s relatively low use of agrochemicals also gives it a comparative advantage in the growing global market for organic produce. Realizing this potential will require investment in rural infrastructure, land governance, agri-tech innovation, and financial services tailored to farmers that work small-sized lands.
Critical Minerals: A Strategic Bridge
While critical minerals remain part of the resource-based economy, they are essential for clean and digital technologies, such as batteries, semiconductors, and electric vehicles. As such, critical minerals like uranium, rare earth elements, and copper, are poised for rising global demand.
Unlike fossil fuels, critical minerals are not burned and do not emit carbon during use. If Kazakhstan can move beyond raw extraction and into processing, refining, and component manufacturing, it could build a value-added industrial ecosystem that supports broader economic modernization. In this way, critical minerals can serve as a bridge between the country’s extractive past and its industrial future.
Challenges on the Road Ahead
Alongside these promising trends, challenges remain. The private sector continues to express concerns about corruption, opaque regulatory practices, and bureaucratic hurdles, including delays in transit permits and inconsistent visa policies. Additionally, reform of state-owned enterprises remains an unfinished task. Ensuring that diversification efforts translate into inclusive, broad-based benefits will require institutional reforms and stronger rule of law.
In addition, economic diversification needs to translate into improved standards of living. In May, the United Nations Development Program (UNDP) ranked Kazakhstan 60th out of 193 countries in its updated 2025 Human Development Index (HDI), marking a rise of seven positions. The report attributed the improvement to gains in life expectancy (from 69.5 to 74.4 years), per capita income (from $22,587 to $30,989), and education levels. While encouraging, this upward trend will need to be sustained.
Kazakhstan’s current economic model has served it well in establishing stability and laying the foundations of a modern state. But with rising global uncertainty and the accelerating pace of technological and environmental change, this model is no longer sufficient. A non-resource-based growth path, anchored in clean energy, logistics, agriculture, and industrial upgrading, is now a strategic necessity. If Kazakhstan succeeds in these efforts, it could emerge as a case study in how to transition from natural wealth to long-term prosperity.
